THE purpose of this article is to put the record straight in the face of an uninformed and mischievous application of subsections 12(4)(a-e) and 12 4 (a-d) of the Labour Amendment Act No. 5 of 2015, by some unscrupulous employers.
Before Labour Amendment Act 5, employers used such paragraphs in terminating contracts of employment.
“The common law as read with section 12(4)(a) of the Labour Act, Chapter 28:01, provides for either party to terminate contract of employment by giving three months, notice. In view of the provisions in question . . . have decided to exercise its right to terminate your employment contract on three months’ notice.”
Prior to the Labour Amendment Act, this route was acceptable, grudgingly though, but after the said amendment, section 4(a) must be read with subsection4a(a-d) as explained below.
It is, therefore, naive for some employers to attempt to use subsection 4(a) without incorporating subsection 4a(a-d) when terminating contracts of employment.
Subsection 12
The section deals with; duration, particulars and termination of employment contracts
Section 12 (3)
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This was not substituted or repealed. It provides: that a contract of employment that does not specify its duration or date of termination, except the contracts for casual or seasonal work or the performance of some specific service, shall be deemed to be of a permanent nature.
A casual worker shall be deemed to have become a permanent worker on the day his/her contract of employment exceeds a total of six weeks in any four consecutive months.
New insertion
Subsection 3(a) provides that regardless of the worker’s status (as listed in subsection 3), such a worker shall become a permanent employee once:
a) The period is fixed by the employment council; or
b) The period prescribed by the minister, where there is no employment council.
Following the expiry of the fixed term period subject to continued employment of the same employee, such an employee then enjoys all benefits accruing from the Labour Act, Chapter 28:01, or the Collective Bargaining Agreement. Subsection 4 (a-e)
This section was not substituted or repealed. A new insertion, subsection 4a(a-d), was introduced. A casual approach may interchange to old subsection 4(a-e) for the new insertion subsection 4a(a-d). Drafters could have realised that these similarities would cause confusion. Hopefully, this will be rectified.
Subsection 4
Gives guideline on terminating employment a) Three months’ notice for a permanent contract or a two-year contract b) Two months notice for a one-year contract but less than two years c) One month notice for a six month contract or more but less a year d) Two weeks notice for a three months contract or more but not less than six months e) One day notice in the case of a contract less than three months or in the case of casual or seasonal work
New insertion: Subsection 4a
The correct reading of this subsection implies that while subsection 4(a-e) provides for the termination on notice, subsection 4a(a-d) is very emphatic and authoritative.
“No employer shall terminate a contract of employment on notice unless:
a) The termination is in terms of an employment Code of conduct or the model code that is a creature of section 101(9) of the Labour Act, Chapter 28:01
b) Parties mutually agree to part ways
c) The employee was employed on a fixed duration or was performing some specific service (own emphasis – this only applies where the period in question is within the fixed period agreed upon at the employment council or prescribed by the minister where there is no employment council, after the expiry of which the employee is deemed to be permanent employee) d) Pursuant to retrenchment in terms of section 12C”
New insertion: Subsection 4b
Provides: where any employee is given notice of termination of contract in terms of subsection 4a and such an employee is employed under the terms of a contract, without limitation of time, the provisions of section 12C shall apply with regard to compensation of loss of employment.
Subsection 4a (a-d) is a direct affront to the wanton job losses witnessed following the Supreme Court judgment of July 17, 2015. The lawmaker are actually saying, while the employer’s right to dismiss is upheld, it must be done with due diligence, hence, the need for some guiding and governing regulations, namely, the code of conduct, mutual agreement by parties, expiry of fixed term duration and retrenchment.
It would be naïve to interpret subsection 4(a-e) as authorising employers to fire willy-nilly, using the “once upon a time common law”. Subsection 4a(a-d) actually sanitises the clumsy situation that had been created by subsection 4(a-e).
The question begging for an answer is, what mischief did Parliament intend to remedy? The mischief rule seeks to give weight to the purpose of the legislature through a purposive approach that looks into four points; namely,
l What was the common law before the making of the Act?
l What was the mischief and defect which the common law did not provide?
l What remedy has Parliament resolved and appointed to cure the disease?
l The true reason of the remedy.
Clearly the legislature frowned at wanton dismissals. Subsection 4a (a-d) is, therefore, remedys that cures the job losses disease.
New insertion: Section 12C
Section 12C was repealed and substituted with another Section 12C, which deals with: retrenchment and compensation for loss of employment on retrenchment or in terms of section 12(4a). Interestingly, it would appear there are only two routes to termination of employment that are recognised by the Act and these are retrenchment and section 12(4a). subsection 4(a) can only be applicable as read with subsection 4a (a-d), it can not stand on its own, it has no feet.
Section 12C provides:
1) An employer who wishes to retrench anyone or more employees shall;
a) Give written notice of his or her intentions,
i) To the works council for the undertaking or
ii) Where there is no works council in place or if the majority of employees concerned agree to such a course, the matter may be referred to the employment council for the industry or undertaking,
iii) If both the works council and employment council are not in place, the matter shall be referred to the Retrenchment Board or its appointee,
b) provide the works council, employment council or Retrenchment Board, as the case may be with details of every employee, whom the employer wishes to retrench and the reasons for the proposed retrenchment.
c) Send a copy of notice to the Retrenchment Board.
2) Provides; for one month’s salary for every two years worked (put differently it translates to two weeks salary for every year worked.)
This is the minimum retrenchment package. Parties can agree on a better retrenchment package should they so choose.
3) An employer alleging financial incapacity, thereby, failing to pay the minimum retrenchment package shall apply for exemption to: a) the employment council of the undertaking b) To the Retrenchment Board, where there is no employment council
The provision to the effect that, where the employer applying for exemption, does not get response after 14 days will be interpreted as approval, is untenable taking into account bottlenecks at government ministries. The employee party could also argue that, failure to get response after 14 days would mean disapproval of the application for exemption. One of the tenets of a good law is to bring finality to issues by way of being clear and unambiguous.
Subsection 4
a) The employment council or Retrenchment Board shall, where the employer claims financial incapacity, demand full disclosure regarding books of account. Where the employer fails to furnish the employment council or the Retrenchment Board with the necessary information, the employer may be asked to pay the minimum retrenchment package over a period of time. The question arises; what is a period of time, specificity is lacking. Such ambiguous phrases tend to delay the process, resulting in prolonged dispute resolution.
b) Where the employer offers to pay the minimum retrenchment package by instalments, it will be taken into consideration whether or not the proposal is reasonable, failing which an alternative payment schedule may be proposed
c) Establish whether or not the employer had considered alternatives prior to terminating employment in terms of section 12D.
It is hoped that this article will shed some light into this contagious cancer of terminating contracts of employment for no apparent reason, except for vindictiveness.
Where on earth can a marriage contract be terminated simply because one party feels like doing so?
lMoses Tsimukeni Mahlangu writes in his own capacity and can be reached on [email protected] for comments.
