End of Employment in South Africa

Employee Termination Procedures & Guidelines in South Africa

Termination procedure

In South Africa, termination of employment must comply with the LRA and the BCEA regarding notice pay. Employers must ensure the termination process is fair and justified and follows proper procedures to avoid claims of unfair dismissal.

With the agreement of the parties

Employment can be terminated by mutual agreement between the employer and the employee. This typically involves a mutual separation agreement outlining the terms and conditions of the termination, including any severance payments, notice periods, and other relevant conditions.

Termination with notice

The LRA only recognises three grounds of dismissal, and all dismissals must be substantively and procedurally fair. Therefore, an employee may only be fairly dismissed if a proper procedure has been followed and for a fair reason. The termination notice must be given in writing. The employer must ensure that the notice period is in line with the BCEA requirements or as specified in the employment contract.

The notice period cannot be shorter than:

• One week if the employee has been employed for six months or less.
• Two weeks if the employee has been employed for more than six months but not more than one year.
• Four weeks if the employee has been employed for one year or more or is a farm worker or domestic worker who has been employed for more than six months.

Termination without notice

Termination without notice is generally reserved for cases of gross misconduct. The employer must conduct a disciplinary inquiry to allow the employee to defend himself/herself against the allegations. If the employee is found guilty of gross misconduct, the termination can be immediate without the need for notice.

Disciplinary procedure

Employers have to follow a set number of steps:

1. Investigation: Upon allegations of misconduct, the employer must conduct an investigation to gather evidence.
2. Notification: If there is sufficient evidence, the employee must be given a written notice detailing the allegations against them and the date, time, and venue of the disciplinary hearing.
3. Hearing: The employee must be given at least 48 hours notice of the hearing. They are entitled to representation by a fellow employee or a trade union representative. During the hearing, both the employer and the employee can present evidence and cross-examine witnesses.
4. Decision: An impartial chairperson will make a decision based on the evidence presented. If the employee is found guilty, the chairperson will consider any mitigating and aggravating factors before deciding on the appropriate sanction, which may include dismissal.

Incapacity procedure

There are different forms of incapacity.  If an employee fails to meet the required standard of performance, an incapacity process for poor work performance must be embarked upon.  This process involves the following steps:

1. Counselling: Meet and agree on measurable performance objectives. Document and monitor the employee’s progress.
2. Improvement period: Provide a reasonable period of improvement based on the nature of issues, length of service and seniority. Offer the necessary resources and support.
3. Written warning: If there is no improvement, issue a written warning. Allow further opportunity to improve.
4. Incapacity enquiry: If performance remains unsatisfactory, conduct an inquiry similar to a disciplinary hearing. Present evidence and allow the employee to defend themselves.
5. Decision: If found incapacitated, the outcome may include dismissal.

Unfair Dismissal Guidelines in South Africa

Employee termination protection

An employee can challenge an unfair dismissal by referring the dispute to the CCMA or the relevant bargaining council. If the dismissal is found to be unfair, remedies may include reinstatement, re-employment, or compensation of up to 12 months’ remuneration or up to 24 months’ remuneration for automatically unfair dismissals.

Penalties for unfair dismissal

If an employee is dismissed unfairly, the employee may refer an unfair dismissal dispute to the Commission for Conciliation Mediation and Arbitration, a statutory arbitrational tribunal.  If successful, the employee could be awarded reinstatement (with or without full back pay), re-employment or compensation for 12 to 24 months depending on the case.

Other End-of-Employment Guidelines in South Africa

Notice period

The notice of termination must be in writing and have to fulfil the following timelines:

• One week, if the employee has been employed for six months or less
• Two weeks, if the employee has been employed for more than six months but not more than one year
• Four weeks, if the employee has been employed for one year or more.

An employee’s contract of employment may provide for periods longer than those but not shorter. If an employer chooses not to retain the employee’s services during a period of notice, the employee may be released early, and the employer must pay the employee in lieu of notice.

Probation period

The probation period must be reasonable, considering the nature of the job, and agreed upon in the employment contract. During probation, the employer must provide guidance, training, and evaluation to help the employee meet performance standards.

If the employee’s performance is unsatisfactory, the employer must embark upon an incapacity process, assessing the employee’s performance throughout the probation, before deciding to proceed to an incapacity enquiry to seek to terminate employment. An employer may not unilaterally terminate an employee at the end of the probation period.

Severance

Employees are entitled to one week’s remuneration for each completed year of service. Severance pay applies primarily to cases of redundancy or retrenchment.

Resignation

The employee must provide a written notice of resignation. The notice period should be in line with the BCEA requirements or as stipulated in the employment contract. The employer cannot refuse the resignation but may negotiate a shorter or longer notice period. If an employee fails to resign in line with their contract of employment, the employer’s consent is required.