Understanding Employer’s Legal Obligations to Employees after Termination
As an employer, it is essential to be aware of your legal obligations to your employees when the employment relationship comes to an end. This article will guide you through the various termination scenarios and the steps you need to follow to comply with the law.
Termination Scenarios:
The employment relationship can end through the following scenarios:
- Dismissal: When you terminate an employee’s contract due to poor performance, ill health, incompatibility, or gross misconduct.
- Resignation: When an employee voluntarily decides to leave the job.
- Retrenchment: When you need to reduce the workforce due to operational reasons, financial constraints, or restructuring.
- Retirement: When an employee reaches the age of retirement and decides to leave the workforce.
- Fixed-Term Contract Completion: When a contract that was set for a specific period expires.
- Mutual Agreement: When both the employer and the employee agree to terminate the employment contract.
- Death: In the unfortunate event of an employee’s passing.
Certificate of Service:
Upon termination, you must provide the departing employee with a Certificate of Service. This certificate serves as a formal acknowledgment of their employment with your company. The document should be written in a clear and understandable language for the employee. If the employee is illiterate or does not comprehend the content, it must be explained orally in a language they understand.
Notice Period:
In the case of dismissal, except for instances of gross misconduct where summary dismissal is justified, you must provide the employee with notice. You have the option to allow the employee to work out their notice period or provide payment in lieu of notice. When dismissing an employee, it is advisable to offer payment in lieu of notice.
Notice Periods:
The statutory notice periods for dismissal are as follows:
- One week’s notice for employees employed for six months or less.
- Two weeks’ notice for employees employed for more than six months, but not more than one year.
- Four weeks’ notice for employees employed for one year or more, domestic workers, or farm workers employed for more than six months.
Leave and Notice Period:
While an employee is on leave, whether it’s annual, sick, or maternity leave, you cannot issue them with a notice of termination. Additionally, the employee cannot take leave during the notice period.
Outstanding Leave and Deductions:
For all forms of employment termination, you must pay the employee any outstanding leave entitlements. Deductions from an employee’s remuneration are not allowed unless they have given written consent or it is required by law, collective agreement, court order, or arbitration award.
Unemployment Insurance (UIF):
When an employee is dismissed, retires, is retrenched, passes away, or their contract comes to an end, they or their dependents may be entitled to claim benefits from the Unemployment Insurance Fund (UIF). You must supply them with a properly completed UI19 form to enable them to claim UIF benefits.
Compensation for Occupational Injuries and Diseases Act (COIDA):
If an employee leaves your service, you must notify the compensation commissioner when completing the monthly COIDA return.
Payroll and Business Premises Access:
Ensure that the employee’s details are removed from the payroll system and that access to the business premises is revoked or restricted when an employee leaves for any reason.
By adhering to these legal obligations, you can ensure a smooth and compliant termination process, minimizing potential disputes or legal issues with departing employees. Always seek legal advice when unsure about specific termination circumstances to protect your business and maintain a respectful exit process for your employees.