adminLabour Matters Davies Ndumiso Sibanda
THE Supreme Court judgment confirming that employees can be terminated on notice has left workers in a state of shock and fear and for those workers working for businesses facing economic hardships, they are now sitting ducks as they can receive three months’ termination notices anytime. Employers, however, need to exercise caution as not all employment terminations can be legally executed on notice.
The termination of employment on notice is a common law right available to the employer, however, this right has been extinguished by the Labour Act where termination is related to retrenchment or where termination is related to misconduct or dismissal.
In these cases, the Act has put in place specific procedures to be followed.
My reading of the judgment leaves me with a conclusion that it would be risky for an employer to rely on it to deal with every case of employment termination.
It must be noted that the matter was argued over only whether the provisions of Section 12B ousted the employer’s common law right to terminate a contract on notice and that left the Supreme Court with the simplest decisions to make as section 12B deals with a form of termination of contract, which is dismissal and does not address forms of termination.
The question whether what the employer had done was retrenchment was never asked thus the Labour Court and subsequently the Supreme Court did not address it.
Had that question been asked, the chances are that depending on arguments submitted by parties, the court decision could have gone either way, for example, if the court had ruled it was retrenchment then the employer could have been told that even if the common law position allowing termination of contracts on notice that route was not available as the common law position was ousted by the Labour Act retrenchment provisions.
On redressing the situation, the Minister cannot use powers given to him in section 17 of the Labour Act to oust a common law position.
Only Parliament can amend the Labour Act to take away the employer’s common law right to terminate contracts on notice.
There is a need for employers to seek legal guidance before terminating employees contracts on notice as the law is not a one size fit all jacket. Where workers challenge their termination on notice, it could be problematic where the notice is found to be mala fide.
However, where organisations are facing financial ruin the prospects of success for workers in my opinion are non-existent.
It must be emphasised that the judgment is not as straightforward as it has been reported in the Press, there is a need for one to go through it carefully to understand the attendant risks and as we move forward, new insight will emerge thus increasing our understanding of its implications.
On the ground, the judgment has definitely created confusion with employers planning to withdraw retrenchment notices and application, some want to abort quantification and reinstate employees and later terminate them on notice.
Others view the judgment as a means of terminating permanent contracts and replace with fixed term contracts. Others see the judgment as a tool to threaten workers to submit to salary reduction or else, some workers are approaching employers accepting packages they had earlier rejected. Some employers are abandoning training on discipline handling arguing that they do not need it as it is cheaper to terminate on notice that go through expensive disciplinary processes.
In some cases the employers view it as a window to get rid of trouble makers, others see it as means of weakening the workers committee through threats.
Others see it as a window for varying all contentious conditions of service using threats of terminating workers on notice. The list is long to be exhausted in this article.
One employer was celebrating saying by the time the Labour Act amendments are complete, it will be several months from now and by then, he will have terminated on notice all the workers that are a problem.
In conclusion, I believe the answer lies in government, labour and employers accepting that there is an urgent need to respond to the Supreme Court decisions.
Further, the Tripartite Negotiating Forum need to do some soul searching and accept they did not do a good job in the crafting of the Labour Act and ensure that they bring into the fold more technical competent minds as they work on the amendment so as to avoid similar challenges into the future.
Davies Ndumiso Sibanda can be contacted on: E: [email protected] C: 0772 375 235.
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