Is termination on notice permissible under new law?

TERMINATION on notice refers to the process of ending an employment or contractual relationship between an employer and an employee by providing advance notice.

The notice period that is given is governed in terms of the law; in our case, the Labour Act (Chapter 28:01).

In this case, the party initiating the termination (usually the employer or the party seeking to end the contract) is required to provide a specified period of notice to the other party. It is a method of termination that allows both parties to prepare for the end of the relationship and make necessary arrangements.

During the notice period, the employee or the party being terminated is usually expected to continue working and fulfilling their obligations until the termination becomes effective.

This allows for a smooth transition and gives the affected party time to find alternative employment or make other arrangements.

In other instances, employers prefer the employee finishes their notice period at home. The approaches differ depending on the nature of the parties involved.

Termination on notice is often considered a fair and reasonable approach, as it provides both parties with an opportunity to plan for the future and minimise any potential disruptions caused by the termination.

This method of termination has often made the working populace anxious, in light of past experiences with the Zuva judgment.

But can an employer terminate a contract of employment on notice under the Labour Amendment Act?

This remains one of the topical issues from the amendment. If you had time to read the Labour Amendment Bill and look at what we finally got, you will notice that there are several provisions that did not make it into the Amendment Act.

This includes provisions that sought to address the issues around termination on notice. I would argue that it is legally possible to terminate a contract of employment on notice.

I will explain why I think termination on notice is alive in terms of the Labour Act, as amended. Do you still remember the Don Nyamande v Zuva Petroleum case?

The Zimbabwe Congress of Trade Unions estimated that about 50 000 employees were terminated on notice within two weeks after the Zuva judgment.

Employers who were struggling to retrench employees proceeded to use the door that had been “opened” by the Supreme Court.

The Don Nyamande v Zuva Petroleum (Private) Limited SC43/15 case, in reality, simply confirmed an employer’s right to terminate a contract of employment on notice.

There was tremendous pressure on the Legislature to plug the hole that had been created, which saw several employees losing their jobs.

This brought into existence Act No. 5 of 2015, which saw the Labour Act being amended.

The 2015 amendment introduced Section 12(4a), which provides the following:

“(4a) No employer shall terminate a contract of employment on notice unless —

(a) the termination is in terms of an employment code or, in the absence of an employment code, in terms of the model code made under Section 101(9); or

(b) the employer and employee mutually agree in writing to the termination of the contract; or

(d) pursuant to retrenchment, in accordance with Section 12C.”

The reading of the 2015 amendment will also demonstrate that termination on notice was still permissible. If the intention was to outlaw it completely, the subsection should have stated that “(4a) No employer shall terminate a contract of employment on notice . . .”

Section 8 of the Labour Amendment Act repeals subsection (4a) and substitutes that subsection with the following:

“(4a) A contract of employment may be terminated only, on the part of an employee, by his or her resignation or retirement, and in the following cases on the part of an employer

(a) by mutual agreement in writing;

(b) for the breach of an express or implied term of contract, upon such breach being verified after due inquiry under an applicable employment code or in any other manner agreed in advance by the employer and employee concerned.”

Perhaps the interesting part in terms of that section is: “A contract of employment may be terminated only . . .”

That particular subsection cannot be interpreted to mean the listed cases are the only instances when a contract of employment can be terminated by an employer.

Section 12(4a) is not exhaustive.

There are several forms of termination of contract that are not listed in terms of that section that are provided for elsewhere, in terms of the Labour Act.

Termination on notice, on the other hand, arises by virtue of the common law, and not the Labour Act.

It is common cause that both the employer and the employee have a common law right to terminate an employment relationship on notice.

“That common law right in respect of both the employer and the employee can only be limited, abolished or regulated by an Act of Parliament or a statutory instrument that is clearly intra vires an Act of Parliament.” (Zuva judgment).

Section 12B of the Labour Act was interpreted in the Zuva judgment as not abolishing the employer’s common law right to terminate employment on notice, in terms of an employment contract.

This means no argument can arise from that section to impeach termination on notice.

Even the very same subsection 4a introduced by the amendment cannot be a legal basis to argue that termination on notice was abolished.

To be continued next week . . .

LEGAL DISCLAIMER: The material contained in this article is set out in good faith for general guidance in the spirit of raising legal awareness on topical interests that affect most people on a daily basis. They are not meant to create an attorney-client relationship or constitute solicitation. No liability can be accepted for loss or expense incurred as a result of relying in particular circumstances on statements made in the article. Laws and regulations are complex and liable to change, and readers should check the current position with the relevant authorities before making personal arrangements.

Arthur Marara is a practising attorney, author, human capital trainer, business speaker, thought leader, law lecturer, consultant coach and legal proctor (University of Zimbabwe).