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Termination of Employment: Notice periods and payment in lieu – A practical guide

Termination of Employment: Notice periods and payment in lieu – A practical guide

Jul 27, 2023 | Articles

Termination of Employment: Notice periods and payment in lieu – A practical guide

In the dynamic landscape of employment, the termination of an employment relationship is often an inevitable part of business operations. As an employer, it is crucial to navigate the provisions regarding notice periods and payment in lieu with care to ensure compliance and maintain healthy employer-employee relationships.

Understanding notice periods:

The Basic Conditions of Employment Act (BCEA) stipulates minimum notice periods based on an employee’s length of service. While these minimum periods act as a foundation, employers may choose to implement longer notice periods through employment contracts or collective agreements. Just keep in mind that even if a shorter notice period is agreed to it will not be valid as the agreement may not deviate from the minimums set out in the legislation. A necessary caveat here is to take note that certain sectors specify their own minimum notice periods so a good starting point would be to establish which sector your business falls under.
As it will be the most applicable, let’s deal with the minimum notice periods as set out in the BCEA. Where the employee is employed for a period of:
  • Less than 6 months – 1 week’s notice is required;
  • More than 6 months, but less than 1 year – 2 weeks’ notice is required;
  • More than 1 year – 4 weeks’ notice is required.
These notice periods are applicable to the employer and employee, so should the employee resign this will apply as well. It happens very often that employees will resign with immediate effect or not complete the notice period, however this entitles the employer to claim and immediately recover certain damages from the employee for the shortfall period of services rendered (make sure to include this clause in the employment contract).
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Payment in lieu of notice:

In some instances, employers may choose to terminate an employee’s contract without providing a notice period. This situation may arise when there are concerns about the employee’s conduct, breaches of employment terms, or severe misconduct. In such cases, employers can make a payment in lieu of notice instead.
This involves compensating the employee for the value of the notice period they would have served. The payment should reflect the employee’s remuneration, including salary, benefits, and any other entitlements. Employers must calculate this sum accurately and ensure that it aligns with legal requirements and the terms outlined in the employment contract. Hint: remember accrued leave days for the final payment.

Immediate termination for serious misconduct:

In cases of severe misconduct, a proper disciplinary hearing will be held and the chairperson might recommend that the employee be summarily dismissed, but what is this and what do I do now? Shortly, summary dismissal is the immediate termination of employment meaning no notice or payment is applicable. Remember that this does not affect salary for days already worked or accrued annual leave pay with the final payment due to the employee.

Conclusion:

When it comes to terminating an employee’s contract, understanding notice periods and the possibility of payment in lieu of notice is essential for employers. By adhering to contractual and statutory obligations, maintaining transparent communication, and ensuring legal compliance, employers can navigate the termination process fairly and minimise the risk of legal disputes later on.

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What can go wrong in the employment relationship?

What can go wrong in the employment relationship?

May 3, 2023 | Articles

What can go wrong in the employment relationship?

At the start of the employment relationship, even though the parties don’t know each other, a fiduciary duty is already in place that requires the employee to act in good faith and in the best interest of the employer. Many things can go wrong in any relationship, therefore it is important that the employer implements a written employment contract with each employee on the first day of employment. A written employment contract creates clarity by confirming the terms and conditions of employment agreed upon and protects the employer in terms of the employment relationship going forward. Take care to include a job description that specifies the employee’s duties and employer’s expectations.
The employment relationship is a relationship of trust based on mutual benefits and respect. As a business owner, the employer should always anticipate what can go wrong in the employment relationship, in order to mitigate risk and be best positioned going forward. Poor work performance, conflict, misconduct, and a breach of trust can place this relationship in jeopardy and employers should take proactive steps to regulate the employment relationship and protect their rights.
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The following issues can go wrong and cause a breakdown of trust in the employment relationship:

  • Conflict
    The workplace is a very diverse environment in terms of culture, religion, beliefs, values, political views, frames of reference, work ethic, opinions, etc. Everyone won’t always get along with each other and when conflict arises, the employer should step in and assist to resolve the conflict before it escalates, or starts to affect more employees and negatively impact on business operations.
  • Misconduct
    Misconduct can be described as an employee’s failure to act according to the employer’s rules and policies. In basic terms, misconduct is a behaviour issue of the employee. Such behaviour is normally deliberate or negligent, and employees can be held accountable for their actions. Misconduct can take various forms, including theft, fraud, dishonesty, insubordination, absence from work without permission, etc.
Every workplace must have a relevant disciplinary code. The disciplinary code is essential in ensuring that there are clear rules in the workplace, with appropriate sanctions, that employees can follow. When these rules are violated, the employer can apply progressive discipline, or in cases of serious misconduct proceed directly with a disciplinary hearing. It is vital to always follow the correct procedure, as in failing to do so can lead to dire consequences with a huge financial impact.
  • Poor work performance
    Poor work performance refers to an employee’s incapacity when an employee fails to reach and maintain the employer’s work performance standards in terms of quality and quantity. All employment contracts imply that the employee undertakes to perform according to the reasonable, lawful and attainable work performance standards set by the employer. Should the employee fail in this duty, despite assistance to reach the required standard, the employee is said to be incapable and the employer has the right to dismiss him/her subject to following the correct procedure. Poor work performance involves a consultation process where the employee is informed of shortcomings and provided with training and guidance to achieve the desired outcome. The employee is then monitored for a reasonable period of time and offered further training and guidance as needed. If the employee does not improve sufficiently, a formal disciplinary process can follow which can lead to dismissal.

It is important to maintain good and healthy working relationships. Boundaries should be set from the beginning of the employment relationship to avoid any uncertainties going forward. Keep the communication lines open for all parties to address any issues which may arise. Employers should take care to follow the correct procedures when taking disciplinary action or holding consultations to avoid ending up at the CCMA (Commission for Conciliation, Mediation and Arbitration).

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Objecting to Con/Arb in the CCMA

Objecting to Con/Arb in the CCMA

May 3, 2023 | Articles

Objecting to Con/Arb in the CCMA

The Commission for Conciliation, Mediation and Arbitration (CCMA) was established as an independent, apolitical dispute resolution body in terms of the Labour Relations Act (LRA). When a case is referred to the CCMA, the employer has an option regarding the processes for objecting to Con/Arb. CCMA processes aim to promote fair labour practices and resolve labour disputes in the workplace. An employee can refer a dispute to the CCMA on the basis of dismissal, wages and working conditions, unfair labour practice, workplace changes and discrimination. Most cases referred to the CCMA relate to unfair dismissal.

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CCMA processes: the three basics

Once the applicant has referred a dispute to the CCMA, it will be set down for conciliation and a commissioner will be appointed to adjudicate the dispute. If conciliation fails, the matter will be set down for arbitration.
  • Conciliation: This is an informal process where a commissioner is appointed to meet with the parties to a dispute and explore ways to resolve the dispute by mutual agreement. If the case is settled, a settlement agreement is signed and the dispute is resolved.
  • Arbitration: This is a hearing process where the parties have the opportunity to state their case. During the process, oral evidence is presented as well as any other forms of evidence in support of a party’s case. The commissioner will issue an arbitration award which is binding and the equivalent of a court ruling.
  • Conciliation/Arbitration (Con/Arb): This is an ongoing process where conciliation and arbitration follow directly after each. If conciliation (settlement) is not reached, arbitration will take place on the same day.
An employer should never ignore any documentation received directly from the CCMA, or a CCMA referral form received from a dismissed employee. Within a few weeks of receiving such a referral form, the CCMA will provide the employer with a set down date. If the employer does not receive a set down date, it is advisable to contact the CCMA in order to follow up on the set down date. If an employer fails to attend the arbitration proceedings without a valid reason, the proceedings will continue in their absence and a default award will be issued against their name.

Objecting to Con/Arb

While Con/Arb can be an efficient way of resolving disputes quickly and cost-effectively, the process can be controversial and some parties may have valid reasons to object to this process, such as:
  • It may not allow for a fair hearing (arbitration).  During the Con/Arb process, the same commissioner who presides over the conciliation process also makes the final decision during the arbitration. This means that the commissioner may already have formed an opinion about the dispute, which can affect their impartiality during the arbitration stage. Should a commissioner feel that they have formed an opinion during the conciliation they could decide to request a different commissioner for the arbitration to ensure fairness and impartiality.


  • It may not provide for a transparent process.  In a traditional arbitration hearing, the parties are allowed to call witnesses, cross-examine them, and present their cases in full.  When a conciliation precedes the arbitration, the proceedings are generally informal with the aim to achieve a settlement, and there may not be the same opportunities for witnesses to be called, or for cross-examination to take place. This can make it difficult for parties to challenge or refute evidence presented by the other side, which can impact the integrity of the arbitration decision.
Parties to a dispute with valid reasons for objecting to Con/Arb process can do so by serving and filing an objection with the CCMA seven days before the date of the hearing and request that the matter be referred to arbitration on a later date. Ultimately, the goal of any dispute resolution process should be to ensure fairness, transparency, and impartiality.
A recent Labour Court judgement (Valinor trading 133 cc t/a Kings Castle v CCMA & Others) held that if a party objects to arbitration immediately after conciliation, the commissioner is not empowered to arbitrate, even though the objection was not done in terms of the Rules of the CCMA. The CCMA however appealed the judgement and the operation of the matter has been suspended pending the outcome of the appeal. The LWO will keep members updated regarding the outcome of the appeal and the impact thereof on CCMA proceedings.
CCMA processes can be intimidating and it is a good idea to get expert advice. An employer can be represented by any employee/director of the business, or by an office bearer/official of an employers’ organisation that is registered with the Department of Employment and Labour.

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Testing positive versus being under the influence

Testing positive versus being under the influence

Feb 10, 2023 | Articles

Testing positive versus being under the influence

Employees who report for duty under the influence of alcohol or drugs present a real problem. The use of alcohol or drugs affects an employee’s sight, speech, coordination and reaction speed. In addition, employees working with machinery or driving a vehicle whilst under the influence pose a high risk to the employer, themselves and their colleagues. It is the employer’s responsibility to create a safe working environment for all employees and must always act in accordance with the applicable disciplinary code.
There are Commission for Conciliation, Mediation and Arbitration (CCMA) rulings where an employee tested positive for alcohol but was not deemed to be under the influence of alcohol. The rate at which a person becomes impaired or intoxicated is influenced by factors such as gender, age, body size, food in the stomach, etcetera.
Because labour law does not specify the symptoms to determine whether an employee is under the influence of alcohol, it is important to implement an alcohol/drugs policy in the workplace. This policy aims to establish the employer’s rules in terms of alcohol and drugs (e.g. possession, consumption, intoxication, etc.) and ensure that all employees are aware of these rules and the consequences if these rules are broken. The policy should be clear and stipulate the rules, sanctions and the test procedure, e.g. a breathalyser test for alcohol or a urine test for drugs. Through this policy, the employer can also acquire the employee’s necessary consent to undergo these tests.
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We recommend that employers implement a “zero tolerance” alcohol-related offence policy, as alcohol or drug-related offences in the workplace are very serious and the employer’s responsibility to address. The seriousness of the offence is directly linked to the employee’s duties and obligations regarding the (possible) consequences of this offence and the impact of this offence on the employer-employee relationship. Take note that the employer must be able to prove that employees are aware of the policy before the employer can take disciplinary action.

Consider the following symptoms to determine whether an employee is under the influence:

  • Red/bloodshot eyes with enlarged pupils
  • Slurred/incoherent speech
  • Change in behaviour
  • Staggering, i.e. the employee is disoriented
  • Delayed reaction and coordination
    Breath smells like alcohol
Take action:
  1. Call the employee aside, preferably to an office. Ensure that a witness is present.
  2. Determine whether the employee is under the influence. Then, request the employee to blow into an alcohol tester, or you can take the employee to a physician for blood tests to determine their blood alcohol level.
  3. If none of these methods is available, or if the employee refuses to cooperate and give permission, it is vital to record their behaviour. Ask witnesses to also record their observations, which must be in writing.
  4. Send the employee home for the rest of the day without pay.
  5. Follow the correct procedure as per your disciplinary code. Keep in mind that the sanction given must be appropriate in relation to the type of work performed by the employee.
Employers must implement clear rules in the workplace and follow correct procedures regarding all labour matters, especially discipline in the workplace. Employers should note that inconsistent disciplinary action/application can lead to unfair labour practices.

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Progressive discipline

Progressive discipline

Feb 10, 2023 | Articles, The LWO newsletter

Progressive discipline

by Abrie Bronkhorst

The relationship between an employer and employee is based on mutual benefits and respect. Clear rules and guidelines ensure that friction and misunderstandings are limited. This will, in turn, promote a productive and positive work environment.
The vast majority of cases referred to the Commission for Conciliation, Mediation and Arbitration (CCMA) are due to “unfair dismissal”, with most of these relating to misconduct that led to the dismissal. In general, arbitration awards granted in favour of the employee are directly linked to the employer not having followed the correct procedure. The CCMA may grant orders for up to 12 months of an employee’s salary against the employer.
Progressive discipline is a widely known principle in the labour environment. It is also one of the most important factors considered by the CCMA, Bargaining Council and Labour Court when a dispute involving unfair dismissal arises. Therefore, employers must ensure that progressive discipline is understood and correctly applied in the workplace.
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What is progressive discipline?

The Labour Relations Act defines progressive discipline as follows: “The approach of progressive discipline in the workplace considers the purpose of discipline as a measure for employees to know and understand which standards are required of them. Reasonable steps must therefore be taken to improve or change employees’ behaviour through the systematic use of warnings and consultations”.
Workplace discipline aims to adjust and improve behaviour through corrective action, consultations and warnings rather than punishing or dismissing an employee. Dismissal should always be the last resort.

Types of misconduct

Every workplace must have a relevant disciplinary code. The disciplinary code is essential in ensuring that there are clear rules in the workplace, with appropriate sanctions, that employees can follow. For these rules to be successfully enforced, employees must be aware of the rules. When these rules are violated, the employer can apply progressive discipline or directly proceed with a disciplinary hearing in cases of serious misconduct. The employer must keep detailed records of offences and the sanctions applied. Even if a warning has expired, it is still recommended that it remains on the relevant employee’s file.
There are different types of misconduct in the workplace that range from less serious to very serious offences. It is influenced by the type of work and responsibility of the employee, the (possible) consequences of the violation, and the impact of the offence on the employee-employer trust relationship.
In cases of less serious offences, the employer can follow an informal process through sound advice, guidance, correction and consultation. However, when the offence is of a serious nature, a formal process can be followed in terms of written warnings and/or dismissal after holding a disciplinary hearing.
We can distinguish between different types of warnings: oral and written. Under written warnings, we can also find serious and final written warnings. This gives the employee an indication of how serious his misconduct was and how important it will be to correct this behaviour.
If the employee repeatedly violates the same rule and the employer applies progressive discipline, the employer can issue a more serious warning if the previous warning is still valid. It is crucial to ensure that the warnings follow each other – a serious written warning cannot follow a final written warning. Employers must further guard against allowing warnings to accumulate unnecessarily. Follow the disciplinary code’s guidelines.
An employer cannot under any circumstances dismiss an employee without first holding a disciplinary hearing. This ensures that a fair procedure has been followed and that there is substantive proof to dismiss the employee.
The employer has to manage several business risks daily. Therefore, it is strongly recommended that employers be proactive by implementing clear rules in the workplace and following the correct procedures concerning all labour law issues, especially dismissal and general discipline in the workplace.

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Whistleblowing

Whistleblowing

Dec 15, 2022 | Articles

Whistleblowing

by Abrie Bronkhorst

Whistleblowing plays a vital role in both public and private organisations. It is defined as the exposing or divulging of information regarding wrongdoing within an organisation. This refers to information on any activity that is deemed illegal, unethical, or not correct within private, public or third-sector organisations.
The Protection Disclosure Act (“PDA”) came into effect in February 2001 and protects whistleblowers in both the private and public sector. This encourages a philosophy of transparency, to fight illegal activities and to create a culture of good governance. In order to be protected by the PDA, a whisteblower must comply with certain requirements. Should these requirements not be met, the whistleblower may be open to legal and/or disciplinary action. These necessary requirements are as follows:
  • acting in good faith;
  • the exposure of information may not be made for personal gain;  and
  • there needs to be significant reason to believe that the information is accurate and true
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The employment relationship is essentially built on trust and part of an employee’s legal duties include the fiduciary duty to always act in good faith, be loyal and to have the employer’s best interests at heart. This also includes the employee’s duty to report any dishonest conduct of co-workers. When an employee is not guilty of an offence, but was aware of the misconduct and did not report it to the employer, the employee violated the trust relationship and can the employer take disciplinary action against such an employee.
Typical misconduct in the workplace that can lead to whistleblowing include theft, fraud, moonlighting, alcohol or drug abuse, the divulging or supplying of confidential information and misuse of the employer’s property. We advise employers to implement a whistleblowing policy to encourage employees to divulge illegal, dishonest or irregular conduct of co-workers. Such a policy can also promote a greater sense of accountability in the workplace.
There should also be a clear procedure for employees who become aware of a co-worker’s misconduct, to follow in order to report such misconduct by blowing the whistle. This procedure should have a clear reporting structure and turnaround times. Employees must also be informed of the protection awarded to whistleblowing employees. An employer may not discipline, demote, transfer, harass or dismiss an employee without cause where the employee has made a protected disclosure, as this action is likely to relate to the protected disclosure. However, disclosure by an employee of his own illegal activities will not be regarded as a protected disclosure and will disciplinary action be justified in such a case.
It is important that employers inform employees of their fiduciary duty and the position of trust they are employed in. In most cases regarding the breach of confidentiality and trust, dismissal as a sanction is appropriate as it impacts directly on the root of the employment relationship that binds an employee to act in good faith and to further the employer’s interests. This misconduct can negatively impact the employment relationship, rendering trust irreconcilable.
It is the employer’s obligation to ensure a safe and secure working environment free from harassment and intimidation. Regular communication is vital in the workplace. Meetings with employees, individually or in a group, will create a platform for employees to voice their thoughts and ideas, as well as to discuss any specific needs. Labour legislation is applicable to all employers and employees and aims to regulate labour relations ensuring fairness in the workplace. Not following the correct procedures can lead to dire consequences with a huge financial impact for the employer.

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