Termination of Contract of Employment Flashcards
The contract of employment may be terminated in the following ways:
1) By notice
In contracts of unlimited duration, either party can terminate the employment by giving notice.
Common law doesn’t specify notice periods; it’s based on the contract terms or what’s deemed reasonable.
Under the LRA (Labour Relations Act), termination by notice is considered a dismissal unless justified by serious misconduct, incapacity, or operational requirements.
2) By effluxion of time or completion of specific task
Fixed-term contracts end when the specified term expires or the task is completed, without needing notice.
If an employee continues working after the term ends with the employer’s approval, the contract is tacitly renewed.
3) By agreement
Parties can mutually agree to terminate the contract.
4) By death of the employee
The contract ends due to the impossibility of the employee performing personal services.
5) By insolvency
In January 2003, the Insolvency Amendment Act 33 of 2002 changed this, so contracts are now suspended, not terminated, upon insolvency.
Under the amended section 38:
Employment contracts are suspended from the sequestration order date.
Employees are not required to work or entitled to remuneration/benefits during suspension.
The trustee or liquidator can only terminate contracts after consulting with affected parties (e.g., trade unions, employees) to try to save the business and retain jobs.
If the business can’t be saved, contracts terminate 45 days after the trustee’s appointment, unless continued employment is agreed upon.
6) By illness of the employee
Continued absence due to illness may justify termination by the employer
The LRA requires a fair procedure for termination due to illness.
7) By impossibility of performance
If it becomes objectively impossible for the employee to perform, the contract terminates without breach.
8) By cancellation (summary termination)
A material breach by one party allows the other to terminate the contract summarily, e.g., summary dismissal for serious misconduct.
9) Redundancy of post
The redundancy of a post offers a valid reason to the employer for terminating the services of an employee, provided he gives the employee sufficient notice of such termination.
A post becomes redundant only when no employee can be required to perform the duties attached to the post anymore. If, however, all or some of the duties attached to the post still exist, the employer is guilty of a breach of contract if he terminates the services of the employee
A “post” refers to a specific job or position within an organization.
